Petrus Resources has sold its oil and natural gas interests in the Peace River area of Alberta, Canada, to Rising Star Resources in a deal worth C$30m ($20m).
Production in the Peace River area during last month averaged about 1,000 barrels of oil equivalent (boe) per day.
The sale included facility interests and 85,530 net acres of undeveloped land, reduced the company’s overall indebtedness and lowered per unit operating costs.
The company plans to use the sale proceeds to reduce the amount owing under its revolving credit facility to approximately C$84m ($64m).
As a result of the sale, the borrowing capacity under the facility was reduced from C$120m ($91m) to C$106m ($81m).
The company's total net debt is also expected to decrease to approximately C$124m ($94m) from C$226.7m ($173m) at the end of last year.
Petrus has also approved a C$17.5m ($13.3m) capital expenditure budget for the second half of this year, which will be used to drill the Ferrier area, a Cardium resource play that has an inventory of low-risk liquids rich gas opportunities.
The company has drilled 13 gross wells in Ferrier to date and acquired additional acreage, as well as expanded its infrastructure.
In the first half of this year, approximately C$7.6m ($5.8m) was invested by Petrus to drill four gross wells and in the second quarter, additional firm transportation contracts were signed with TCPL in Ferrier reducing the company's exposure to potential future TCPL outages.
Petrus Resources president and CEO Kevin Adair said: "Petrus has continued to reduce overall debt levels in response to lower commodity prices.
“Lower operating costs resulting from infrastructure investments in Ferrier, together with lower capital costs per new well have resulted in very significant improvements within our Ferrier drilling economics.”
